First home buyer confidence has made strides in South Australia, with overall confidence increasing by 8.6% from October 2015, according to a new survey.
The survey, conducted by government-backed HomeStart Finance, surveyed more than 500 South Australian home buyers and first home buyers across five key factors: employment security, ease of market entry, property affordability, repayment affordability, and whether now is the right time to enter the property market.
Across all five measures, HonmeStart reported South Australian first home buyers were feeling more confident than they were six months ago when the survey’s baselines were established.
HomeStart Finance’s CEO, John Oliver, said the results were unexpected.
“The results were unexpected because anecdotally the view is that it is more difficult than ever for first home buyers to break into the housing market,” he said.
“What these results tell us is that even though rising house prices and high upfront costs make buying your first home challenging, home buyers are growing in confidence about the prospect of achieving the great Australian dream. Some of this may be attributed to the current low interest rate environment.”
First home buyers were most confident about potential barriers such as deposit size required, and other fees and charges, with confidence about ease of market entry up significantly (33.3%).
There was an 8.6% increase in the perceived affordability of housing in South Australia and a 4.9% increase in sentiment about now being a good time to buy a home.
There was a marginal increase (3.8%) in first home buyer sentiment on how they were positioned to manage loan repayments and other living costs.
“Previous research has shown that the upfront costs, such as the deposit and fees, are one of the largest barriers to home ownership. However, the increased positivity expressed about the ease of market entry highlights that first home buyers are less concerned about these factors at the current time,” Oliver said.
“The Index also suggested that home buyers are confident that there will be no significant changes in the next 12 months that will impact on their chances of buying a home, such as increase in property prices, rental prices, and fees and charges for home loans.”
Nationally, according to the Adelaide Bank/REIA Housing Affordability Report, the number of first home buyers decreased by 16% in the first quarter of 2016.
First home buyers now make up 14.6% of the Australian owner-occupier market. The figure is significantly smaller relative to the long-run average of 19.7% and is the lowest since the June quarter of 2004.